IRS Updates Tax Brackets, Saving Americans Money Next Year
The IRS on Tuesday announced new tax rate changes that would save many Americans money in 2023 filing.
Tax brackets will rise by nearly 7% to quell soaring inflation, the IRS said in a statement. As a result of the revised rates, Americans whose earnings have not kept pace with inflation would now fall in a lower tax bracket.
Inflation grew 8.2% in September, according to the Bureau of Labor of Statistics. A key metric, core inflation, rose by 6.6%—a 40-year high.
According to the agency, average hourly wages declined 3% from last year in September when seasonally adjusted.
The nearly 60 imminent tax provisions, including standard deductions for single and married filers, will help ease the burden of rising costs, the IRS said.
Under new IRS guidelines, the revised standard deduction for married couples filing jointly is $27,700, a $1,800 increase from last year. Meanwhile, for single taxpayers and married individuals filing separately, the standard deduction grew to $13,850 for 2023, representing a $900 increase.
The lowest rate is 10%, for single individuals with incomes of $11,000 or less, the agency said.
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